Continental AG to invest $216 mln in China plant

FRANKFURT, Oct 28, 2007; Reuters reported that Germany's Continental AG said it plans to invest about 150 million euros ($216 million) to build its first tyre manufacturing plant in China to boost sales in the world's second-largest auto market.

Production at the plant in Hefei, in Anhui province, is due to start at the beginning of 2010, Continental said in a statement on Sunday.

The Chinese government still had to approve the plant construction, it said.

Continental Chief Executive Manfred Wennemer said in the statement the company's car tyre division could "profit from the continuing extremely positive market development" in China.

The company would focus on making its Continental premium brand tyres at Hefei. Long-term, it planned to produce 4 million car tyres annually at the plant, mostly for the rapidly expanding Chinese market.

Continental started exporting to China 10 years ago. But the firm, which set up its first China office in January 2006, is a relative latecomer to the country compared with Goodyear Tire & Rubber and Michelin, which began local production in the mid-1990s.

Continental told Reuters in July it was looking to start production in China.